Almost 41% of P&I Online readers believe institutional investors should cap exposure to a single stock at 5%, according to a recent P&I Online poll.
The question was asked in conjunction with a story about Apple's unexpected drop in share price on Jan. 23 following its earnings announcement. Apple is 6.8% of the average institutional large-cap growth portfolio, and 33 pension funds suffered paper losses of $2 billion because of the drop.
Although there was overwhelming support of capping exposure to one equity, the next most common response, at 23.6%, was no limit; 22.8% of respondents were even stricter believing institutional investors should limit exposure to 3%. More generous caps of 8% and 10% received weaker reader support at 5.1% and 7.6%, respectively.